scholarly journals The Impact of Market Discipline on Banks’ Capital Adequacy: Evidence From an Emerging Economy

2015 ◽  
Vol 4 (1) ◽  
pp. 61-73 ◽  
Author(s):  
Ayesha Afzal
Keyword(s):  
Perceived Risk ◽  
Banking System ◽  
Empirical Support ◽  
Market Discipline ◽  
Capital Adequacy ◽  
Risk Level ◽  
Bank Capital ◽  
The Cost ◽  
The Impact

This study presents empirical support for the role of market discipline in augmenting bank capital ratios in a competitive banking environment. Using a panel dataset on domestic commercial banks in Pakistan from 2009 to 2014, the study determines if the market penalized banks for any increase in their risk profile through a rise in the cost of raising funds. The results point to a significant relationship between capital adequacy and other risk factors, with the cost of deposits demonstrating how depositors align the required return to the perceived risk level of the bank. These findings have important implications for policymakers as market discipline could complement the role of regulators, which would eventually lower the cost of supervision. Moreover, the focus of international reforms as seen through the implementation of Basel III should continue to be on developing a more competitive and transparent banking system.

scholarly journals Credit Risk and Shareholders’ Value in a Developing Economy: Evidence from Pakistani Banking System

2012 ◽  
Vol 4 (2) ◽  
pp. 87-95
Author(s):  
Ahmed Arif ◽  
Mohammad Afzal .
Keyword(s):  
Credit Risk ◽  
Value Creation ◽  
Panel Data Analysis ◽  
Banking System ◽  
Capital Adequacy ◽  
Loan Loss ◽  
Creation Process ◽  
The Impact ◽  
Value Creation Process

The present study examines the role of credit risk in value creation process in banking system of Pakistan. This study here develops a conceptual model with three antecedents to credit risk. These antecedents are loan loss provision, advances, and capital adequacy ratio. The study analyzes the impact of these antecedents on accounting return on equity (ROE) and market return on shares (ROS). The data come from 20 banks listed on Karachi Stock Exchange (KSE) for 2004-2009. The study includes panel data analysis to analyze the relationship between the selected variables. The results of this study expose a minimal role of credit risk in value creation process in banking system of Pakistan. The results further reveal that banks with higher advances in their portfolio are successful in getting the confidence of shareholders.

scholarly journals Bank Transparency and Risk Taking: Empirical Evidence from Tunisia

2016 ◽  
Vol 8 (5) ◽  
pp. 111 ◽  
Author(s):  
Raoudha Dhouibi ◽  
Abir Mabrouk ◽  
Emna Rouetbi
Keyword(s):  
Risk Taking ◽  
Voluntary Disclosure ◽  
Stock Exchange ◽  
Banking System ◽  
Market Discipline ◽  
Capital Adequacy ◽  
Financial Accounting ◽  
Necessary Condition ◽  
Basel Accord ◽  
The Impact

<p>An important unresolved issue in finance is the extent to which bank transparency promotes or undermines banking risk-taking. Financial accounting information is an essential component of transparency and a necessary condition for market discipline. This latter can be conceptualized as a market-based incentive scheme with which investors in banking securities penalize banks for greater risk-taking by asking for higher returns on their investments. However, in developing countries, where financial markets are insufficiently developed, the role of market discipline in limiting banks’ risk-taking may be restricted.</p>This paper examines the impact of transparency, as measured by voluntary disclosure of financial information, on the fragility of Tunisian banks. This study is motivated by the decision of the Central Bank of Tunisia to implement the directives of the second Basel Accord to improve the soundness and the safety of the Tunisian banking system. We examine a sample of ten Tunisian banks listed on the Stock Exchange of Tunis over the period 2000-2011. The results show that transparency has no effect on Tunisian banks’ risk-taking. Similarly, the results indicate that the capital adequacy ratio has no effect on the non-performing loans rate. These results may undermine the effectiveness of the guidelines of the Basel Committee agreements to reduce risk-taking by Tunisian banks.

scholarly journals NBU'S influence on economic growth through bank capital regulations

2020 ◽  
Vol 93 (8) ◽  
pp. 47-56
Author(s):  
L. Sus ◽  
◽  
Yu. Sus ◽  
M. Sapatsinsky ◽  
S. Cherepansky ◽  
...  
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Banking System ◽  
Developed Countries ◽  
Capital Adequacy ◽  
Necessary Condition ◽  
Bank Capital ◽  
Regulatory Capital ◽  
Banking Institutions ◽  
The Impact

In crisis situations, stable and efficient functioning of banking institutions is a necessary condition for country’s economic growth. Capitalization is one of the important factors that creates a positive impact of the domestic banking system on economic development. The purpose of the study is to substantiate the patterns and differences in the strength and nature of the impact of capital adequacy requirements on the financial and economic development of countries. The key tasks include: research of capitalization indicatorsof the banking system of Ukraine; identification of the impact of bank capital adequacy on the financial and economic development of individual European countries and other highly developed countries. The research methods were: theoretical -study of foreign and domestic scientific literature, materials and publications, and empirical -measurement, comparison, grouping, rating, correlation and regression analysis.The article analyzes the essence of the concept of "bank capital" and identifies the peculiarities of its formation. The dynamics of equity and authorized capital of Ukrainian banks in recent years has been studied and the capitalization indicators of the banking system have been calculated. The structure of bank capital in terms of banking groups is presented. The share of equity of the largest banks in the banking system of Ukraine is calculated. The banks were grouped by the amount of capital in order to identify those banking institutions that need further additional capitalization. Prospects for the development of sources of growth of bank capital of state, foreign and private banks of Ukraine are analyzed and evaluated. The economic standards of the NBU (size of regulatory capital, adequacy of regulatory capital, adequacy of fixed capital) are characterized and the dynamics of regulatory capital indicators is presented. The rating of banks in Ukraine according to the highest and lowest indicator of regulatory capital adequacy is built. The results of the correlation between the capital of the banking system and the financial and economic indicators of development of a number of European and other highly developed countries are presented. The regularities and differences of the influence of banks' capital adequacy on the financial and economic development of countries using the method of correlation-regression analysis are characterized.Prospects for further research in this area are the improvement of existing or development of new economic and mathematical models to determine the forecast indicators of financial and economic development of the country when changing the supervisory requirements for capital adequacy of banks.

scholarly journals Analysis of the Capital Structure of Commercial Banks

2021 ◽  
Vol 21 (3) ◽  
pp. 45-69
Author(s):  
A. A. Perfilyev ◽  
L. P. Bufetova ◽  
Binbin Shen
Keyword(s):  
Capital Structure ◽  
Banking System ◽  
Point Of View ◽  
Capital Adequacy ◽  
Bank Capital ◽  
State Of The Economy ◽  
The Usa ◽  
The Stability ◽  
The Capital Structure

The article presents a regression analysis of banking determinants and their impact on the capital structure of banks for the period 2011–2019 on an extensive statistical base of the countries of India, Russia, China, the USA and banks in the Eurozone. The study proceeds and is based on the empirical results of the analysis of the structure of bank capital, carried out for individual countries up to the specified period. These results turned out to be quite contradictory regarding the significance of different determinants of the structure of bank capital. Understanding the influence of the determinants on the stability of the banking system, the article attempts to explain the differences for the period 2011–2019, when the countries' banking systems adopted the Basel 3 capital adequacy requirements. It is shown that 1) the capital structure of banks is influenced not only by banking determinants, but also by development conditions, regulatory institutions, the state of the economy, which is evidence of the need to analyze the problems of forming the capital structure of banks by countries, types of banks, etc.; 2) banking determinants between 2011 and 2019 explain the variation in bank capital structure to a significant extent and regulatory action is relevant for all countries. From the point of view of the peculiarities of the formation of the structure of bank capital and the role of the regulator in this case, directions of modification of relevant theories of capital structure are proposed.

scholarly journals Assessing the Impact of Bank Concentration and Liquidity of Refah Bank Branches on Profitability during the Period1383-190

2014 ◽  
Vol 4 (1) ◽  
pp. 248
Author(s):  
Hossin Ostadi ◽  
Nastran Monsef
Keyword(s):  
Commercial Banks ◽  
Bank Capital ◽  
Factors Affecting ◽  
Bank Branches ◽  
Independent Variables ◽  
Bank Deposits ◽  
The Impact ◽  
Bank Concentration ◽  
Research Period

Profitability is an important factor to show this articledoeswhat is the role of the intermediary bank to collect your savings and allocation of loans.  Given the importance of profitability indicators in this study, the factors affecting the profitability of commercial banks in Iranare analyzedwith emphasis on the degree of centralization and bank deposits. Dependent variable is indicators of profitability (ROE, ROA) and bank deposits, bank size, bank capital, focus on liquidity and banking requirements are independent variables. Correlation analysis and OLS regression are used and the research period is 1381 to 1390 that the country's territory where bank branches.Our results indicate that the effect of bank size on profitability is positive and the increase in bank size on profitability is increased. Impact on the profitability of bank deposits is positive, ie increasing the profitability of bank deposits increased. Finally, the impact of bank concentration on profitability is positive. Increasing the bank's focus profitability increases. Moreover, the results adversely affect the liquidity of the index is profit. 

scholarly journals Assessing the Impact of Corporate Governance Index on Financial Performance in the Romanian and Italian Banking Systems

2021 ◽  
Vol 13 (10) ◽  
pp. 5535
Author(s):  
Marco Benvenuto ◽  
Roxana Loredana Avram ◽  
Alexandru Avram ◽  
Carmine Viola
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Banking Sector ◽  
Research Question ◽  
Interactive Effect ◽  
Banking System ◽  
Capital Adequacy ◽  
Banking Systems ◽  
Governance Index ◽  
The Impact

Background: Our study aims to verify the impact of corporate governance index on financial performance, namely return on assets (ROA), general liquidity, capital adequacy and size of company expressed as total assets in the banking sector for both a developing and a developed country. In addition, we investigate the interactive effect of corporate governance on a homogenous and a heterogeneous banking system. These two banking systems were chosen in order to assess the impact of corporate governance on two distinct types of banking system: a homogenous one such as the Romanian one and a heterogeneous one such as the Italian one. The two systems are very distinct; the Romanian one is represented by only 34 banks, while the Italian one comprises more than 350 banks. Thus, our research question is how a modification in corporate governance legislation is influencing the two different banking systems. The research implication of our study is whether a modification in legislation, thus in the index of corporate governance, is feasible for two different banking sectors and what the best ways to increase the financial performance of banks are without compromising their resilience. Methods: Using survey data from the Italian and Romanian banking systems over the period 2007–2018, we find that the corporate governance has a significant, positive and long-lasting effect on profitability and capital adequacy in both countries. Results: Taking the size of the company into consideration, the impact of the Index of Corporate Governance (ICG) on a homogenous banking system is positive while the impact on a heterogeneous banking system is negative. Conclusions: Our study provides evidence of the impact of IGC on financial performance and sheds light on the importance of the size of the company. Therefore, one can state that the corporate governance principles applied do not encourage the growth of large banks in heterogeneous banking sectors, thereby suggesting new avenues of research associated with new perspectives.

scholarly journals Analyzing Impact of Computer Attacks on the Banking System of the Russian Federation

2019 ◽  
pp. 202-210
Author(s):  
A. A. Salcutan
Keyword(s):  
Russian Federation ◽  
Banking Sector ◽  
International System ◽  
Banking System ◽  
Russian Economy ◽  
Computer Attacks ◽  
The Russian Federation ◽  
The Impact ◽  
Swift System

The article analyzes damage caused by attacking finance organizations in the Russian Federation through activization of hacker groups. The mentioned attacks were mainly directed at banking cards’ processing, cash machines and the SWIFT system, an international system of transmitting finance information and payments. The growth in hacker penetrations can be seen in all sectors of Russian economy, it is based on informational confrontation and aims at destabilization of considerable objects of critical information infrastructure. Today special attention is paid to attacks of hacker groups, which get financing from states and criminal groupings in order to exert influence on the leading banks of the world. The author investigated the key methods of attacks of finance organizations. The role of the Federal service on technical and export control and the Department of information security of the Bank of Russia was described. By assessing the impact of computer attacks the author came to the conclusion that the Russian banking sector is vulnerable to computer attacks on informational systems that could cause damage not only to small but also big credit organizations, which possess over 60% of the Russian banking sector assets.  

scholarly journals The impact of capital ratio on lending of EU banks – the role of bank specialization and capitalization

Equilibrium ◽  
2016 ◽  
Vol 11 (1) ◽  
pp. 43 ◽  
Author(s):  
Małgorzata Olszak ◽  
Mateusz Pipień ◽  
Sylwia Roszkowska
Keyword(s):  
Commercial Banks ◽  
Robust Estimator ◽  
Bank Capital ◽  
Savings Banks ◽  
Cooperative Banks ◽  
Lending Activity ◽  
The Impact ◽  
The Relationship

In this paper we aim to find out whether bank specialization and bank capitalization affect the relationship between loans growth and capital ratio, both in expansions and in contractions. We hypothesize that the impact of bank capital on lending is relatively strong in cooperative banks and savings banks. We also expect that this effect is nonlinear, and is stronger in “low” capital banks than in “high” capital banks. In order to test our hypotheses, we apply the two-step GMM robust estimator for data spanning the years 1996–2011 on individual banks available in the Bankscope database. Our analysis shows that lending of poorly capitalized banks is more affected by capital ratio than lending of well-capitalized banks. Loans growth of cooperative and savings banks is more capital constrained that lending of commercial banks. Capital matters for the lending activity in contractions only in the case of savings and “low” capital banks.

scholarly journals Editorial introduction: Gender and political financing

2021 ◽  
pp. 019251212110409
Author(s):  
Rainbow Murray ◽  
Ragnhild Muriaas ◽  
Vibeke Wang
Keyword(s):  
Political Parties ◽  
Case Studies ◽  
Political Institutions ◽  
Institutional Reform ◽  
Special Issue ◽  
Women Candidates ◽  
Female Candidates ◽  
The Cost ◽  
The Impact

Contesting elections is extremely expensive. The need for money excludes many prospective candidates, resulting in the over-representation of wealth within politics. The cost of contesting elections has been underestimated as a cause of women’s under-representation. Covering seven case studies in six papers, this special issue makes theoretical and empirical contributions to understanding how political financing is gendered. We look at the impact on candidates, arguing that the personal costs of running for office can be prohibitive, and that fundraising is harder for female challengers. We also explore the role of political parties, looking at when and how parties might introduce mitigating measures to support female candidates with the costs of running. We demonstrate how political institutions shape the cost of running for office, illustrate how this is gendered and consider the potential consequences of institutional reform. We also note how societal gender norms can have financial repercussions for women candidates.

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